The Bend City Council agreed Wednesday to shell out about $2.5 million to continue extending Empire Avenue east to NE 27th Street.

About $1.8 million will go to Knife River Corp. to continue designing a new section of road between Purcell Boulevard and 27th Street. The roughly $700,000 that remains is for Otak, a Portland-based engineering and architecture firm that represents the city in construction management.

The city is using Otak to ensure costs for design and construction remain competitive, said Sinclair Burr, a city project engineer.

Most government contracts are awarded through a competitive bid process, which means the contractor who promises the lowest cost will get the bid. But the Empire Avenue project was awarded through an alternative contract: a progressive design-build that has a project’s designer and builder working together early in a project.

The whole project is estimated to cost about $23 million, but it’s been split up into piecemeal contracts.

That means construction can be done as designs are complete, rather than waiting until the full design is done to break ground. Construction will be done more quickly, Burr said, and the total cost remains about the same as it would in a traditional bid process.

“I think we are on a track that’s much faster than any other delivery method we’ve worked with,” Burr said.

Construction began in September on the $5.5 million first phase, which includes road improvements between NE 18th Street and Purcell and a new roundabout at the intersection of Empire and Purcell.

Empire Avenue is expected to partially reopen in December, and that phase of construction should be completed by next June.

Construction on the new road section could start in 2019 and wrap up by the middle of 2020. Design would cost about $660,000, and the total cost is around $10 million.

The second phase of the project also includes improvements to Purcell Boulevard and two intersections. It adds another $1.15 million to the design cost and an additional $8.1 million to the cost.

Empire Avenue is considered a crucial east-west connecting road that will be vital to annex and develop vacant land north and east of Bend.

Earlier this year, city councilors voted to increase water and sewer fees and hike developer fees to pay to finish Empire Avenue and extend Murphy Road east to 15th Street.

That vote increased fees charged to developers by 28.7 percent — an increase from $5,285 to $6,800 for a single-­family home.

Water and sewer fees, meanwhile, rose 1 percent, or about $1 to $3 more each month for the average homeowner.

A proposed program that would buy more time for homeowners on septic systems to connect to the city sewer and save them thousands of dollars is a step closer to existing. Councilors voted 6-0 to ask city attorneys to bring proposed amendments to Bend’s city code creating such a program for a vote on Dec. 5.